New code of conduct for short-term insurers

05 May 2010 Gareth Stokes
Gareth Stokes, FAnews Online Editor

Gareth Stokes, FAnews Online Editor

The South African Insurance Association (SAIA) publicly launched The SAIA Code of Conduct at a media event in Johannesburg last week. The revised code results from the association’s recent drive to revitalise the short-term insurance industry’s image and reputation. SAIA chairperson, Ronnie Napier, observed that the new code was streets ahead of the 1-page 10-point document drawn up in 1989, and a logical ‘next step’ following the 3-page code accepted in 2002. “The previous codes were very general in nature and failed to stand the test of time,” said Napier.

Why does the short-term insurance industry need a code? Napier observed that we live in an age of consumerism, where treating customers fairly has become a focal point for businesses regardless of the sector they operate in. South Africa is already at the forefront of consumer protection initiatives. The country’s Consumer Protection Act (CPA) urges every consumer-facing industry to create and adhere to its own ‘best practice’ guides. The code is the short-term insurers’ response to this ‘best practice’ requirement and will address issues of image and reputation in the eyes of consumers, regulators and the media.

Regulator welcomes new Code

Is self-regulation the way to go? “Self-regulation is about members being committed to self-imposed, ethical and professional business practice,” said Napier, adding that the code was extremely important to all SAIA members. Dube Tshidi, chief executive of the Financial Services Board (FSB) welcomed the SAIA Code of Conduct. He said the code would “not only improve standards of behaviour in the sector, but also increase consumers’ trust in short-term insurance providers.” His sentiment is shared by Viviene Pearson, SAIA Manager: Image and Reputation, who shared some of the groundwork completed while drawing up the new code.

At the outset, SAIA considered international insurance company codes of conduct and the latest versions of ‘best practice’ documents from other domestic industries. The organisation also scrutinised existing legislation including the CPA, the Competitions Act, the FAIS Act and the relevant insurance laws (including the Insurance Laws Amendment Act). The body then sought comment from consumer journalists and various legislated and voluntary consumer protection bodies. “We held extensive discussions with our member companies at each step of the process,” said Pearson. “Our members have to implement a brand new code that is quite different from the old code.”

What does the Code require from SAIA members? The 20-page document, in force since February 2010, contains sections on professional standards, communication, information, insurance sales and policy maintenance, insurance claims, fraud and improper conduct and cancellation of insurance, among others. It also contains an introduction and a comprehensive list of relevant definitions. Section 10 (insurance claims) stipulates the step-by-step processes SAIA members should complete when handling or rejecting claims. The section also handles topics such as double insurance, extraordinary circumstances and repairs, workmanship and materials.

Treating customers fairly

Section 1.5 of the Code reads: A relationship of good faith lies at the heart of the insurance contract between insurers and customers. It is with this relationship in mind that SAIA members undertake to comply with the requirements of the SAIA Code of Conduct. At the same time, it is expected that customers will also conduct themselves with the spirit of honesty and good faith. Clearly one of the overriding objectives of the code is to facilitate, monitor and enforce the fair treatment of short-term insurance customers. This is part of the evolution of the short-term insurance environment to one dominated by consumer-centric trends. Insurers have to manage image and reputation to retain existing customers and expand their customer base. “The code has been agreed and signed off by all the SAIA members,” said Napier. “It is an extremely comprehensive and appropriate document that should take relationships between insurers and customers to new heights.”

The code is a living document and will be reviewed on a regular basis to ensure it remains current. Industry stakeholders have welcomed the code as a major step toward the goal of self-regulation that should materially enhance the industry’s image and reputation!

Editor’s thoughts: Although we welcome the definitions and behaviours included in the comprehensive SAIA Code of Conduct we get the feeling the document merely summarises ‘best practices’ that have been widely accepted by the industry for quite some time. Do you think the latest SAIA code will improve relations between short-term insurers and policyholders? Add your comment below, or send it to


Added by David Boshielo, 26 Jul 2010
Was there any input sought & considered in the CODE from the semi-literate consumer on the factory floor.The consumer who does not know of the Consumer Rights or organisation protecting & representing him/her? The consumer who around the late 90s early 2000s had an education policy that lapsed and lost what little he/she had been paying as a monthly premium.
Report Abuse

Comment on this post

Email Address*
Security Check *
Quick Polls


How confident are you that insurers treat policyholders fairly, according to the Treating Customers Fairly (TCF) principles?


Very confident, insurers prioritise fair treatment
Somewhat confident, but improvements are needed
Not confident, there are significant issues with fair treatment
fanews magazine
FAnews June 2024 Get the latest issue of FAnews

This month's headlines

Understanding prescription in claims for professional negligence
Climate change… the single biggest risk facing insurers
Insuring the unpredictable: 2024 global election risks
Financial advice crucial as clients’ Life policy premiums rise sharply
Guiding clients through the Two-Pot Retirement System
There is diversification, and true diversification – choose wisely
Decoding the shift in investment patterns
Subscribe now